Rimini Street, a successful third party provider of support and maintenance (S&M), has managed to establish a growing client base for its service lines in a relatively short time. For more information on Rimini Street, please see part one of this series Is There a Street Corner for a Vendor-neutral Third Party Support and Maintenance Provider?
In December 2006, Rimini Street announced delivery of its year-end processing package and required tax and regulatory updates for 2007—ahead of Oracle's and TomorrowNow's planned tax and regulatory release dates. Rimini Street's tax and regulatory team for PeopleSoft products works with local, state, and federal government representatives, as well as all major tax and regulatory services. This is to ensure that the latest tax and regulatory updates are immediately identified, scoped, coded, extensively tested, packaged, and reverified for accuracy with government agencies to ensure the highest quality deliverables possible and the fastest "legislature-to-live" delivery cycles. With the combined engineering experience of each of its team members in developing and delivering more than 500 tax and regulatory update packages for PeopleSoft products, Rimini Street fields one of the most experienced PeopleSoft tax and regulatory teams in the industry, the core of which comes from key players at TomorrowNow and PeopleSoft.
Some user enterprises might want to outsource S&M to a company that actually focuses on the support of a specific product. Since these companies tend to have more customers with the specific application product and access to a greater pool of talent that is experienced with the product, the risk is usually lower, and the level of customer satisfaction is higher.
To provide a combination of third party S&M with outsourcing, USi (http://www.usi.com), an AT&T company and a leading application service provider (ASP), and Rimini Street announced an alliance in December 2006 to provide USi clients with a single-source option for hosted PeopleSoft applications as well as S&M. This new alliance agreement allows Rimini Street support for USi clients to be added by request to USi client service agreements. The offering is thereby designed to seamlessly integrate USi's client support model with Rimini Street's back end software maintenance.
USi has a strong history of implementation and support of hosted Oracle products. The company delivers application outsourcing, remote management, professional services, software as a service (SaaS) enablement, and e-business development and hosting services to more than 150 world-class organizations in over 30 countries. USi's clients have access to a broad portfolio of service offerings, including Ariba, IBMWebSphere, MarketLive, Microsoft, Oracle, PeopleSoft, and Siebel, as well as e-commerce solutions developed and delivered by USi.
With 400 hosted and managed instances of enterprise applications in the Oracle family of applications, USi's vast experience has allowed the company to develop a strong methodology for implementation and management of complex enterprise resource planning (ERP) systems. In addition to USi's comprehensive support model, the company provides its clients with custom monitoring, which guarantees availability and performance. Rimini Street Support for USi Clients is available immediately to clients that are working with USi for hosted and remote-managed PeopleSoft applications.
Actually, what Rimini Street is doing is really not that earth-shattering; rather, it is plain common sense. The firm is not trying to be a software vendor, but a focused system implementation (SI) and consulting firm that happens to sell its services under service contracts instead of mere break-fix arrangements. If the circumstances were different (that is, if the company was not perceived by Oracle as bottom-feeding and client-poaching), Rimini Street could in fact be an Oracle partner. As a matter of fact, Oracle and SAP compete with their implementation partners for maintenance contract dollars time and again, but typically not by offering 50 percent discounts for broader piecemeal choices of S&M items that customers can select.
The possibility of Rimini Street becoming an Oracle partner in the future is further supported by the fact that applications would not be owned by another software provider.
Therefore, Rimini Street's objective is not to eventually move clients from Oracle to new software platforms, but rather to help clients maximize the value of their existing PeopleSoft, Siebel, and JD Edwards software.
Appealing too is the company's rather laid-back demeanor in approaching and attracting prospects. Rimini Street is quite clear about its sweet-spot clients, and is even turning many potential clients down so as not to disappoint these prospective customers' expectations down the track. For one, Rimini Street is not interested in the portion of customers (sometimes called early adopters) that want to stay on the leading, or even bleeding, edge of applications and technologies. This would mean that both the provider and the clients would need to invest in testing, fixing, and growing the next generation of software (that is, around several diverse technologies and platforms, including service-oriented architecture [SOA], middleware, and open source). If an organization strives to deploy every latest and greatest software release and update, it is likely that an alternative S&M program is not a good fit for it.
Also, Rimini Street advises user enterprises to remain on their vendors' contracts for at least a year after implementation, after which time they will likely be more suitable candidates for Rimini's support program (since much of the growing pains will be sorted out by then). Also, support for some of the products that have garnered hardly any install bases (such as the PeopleSoft Campus module) are not offered by this third party provider. Rimini Street's S&M is for tried-and-true products.
Last but not least, the firm warns prospective clients that their ongoing PeopleSoft, Siebel, or JD Edwards annual maintenance agreements may have cancellation time requirements, or may be automatically renewed if a certain cancellation notice period expires. Rimini Street recommends that potential clients allow sufficient time to pass before the next annual renewal date to ask for a proposal and quote from the provider, as well as allow enough time to explore the significant benefits of switching to Rimini Street's S&M services. It is only logical that an enterprise reviews its contract for specific cancellation terms.
To be sure, no one sees vendor-neutral, third party S&M providers such as Rimini Street and TomorrowNow as the next market shakers. The market opportunity for these providers is but a fraction of the install bases of large vendors. However, there are enough prospective clients out there for these third-party service providers to create a niche customer base. What's more, the offerings from these third party S&M providers may compel larger vendors to make even more appealing S&M discounts or offers to their newly aware customers.
Conclusion and Recommendations
Companies that are "in the know" have begun to investigate the options available to them for software S&M. Alternative software S&M arrangements from such providers as Rimini Street are not necessarily the best fit for everyone. The most typical converts tend to be the technologically conservative and savvy companies that are not in need of most upgrades. Hence, longer product release life spans and higher return on investment (ROI) from existing enterprise software investments are two of the most appealing benefits of third party S&M agreements for such organizations.
The proven benefits these clients are enjoying have validated the industry and eliminated the perceived risks that have long been perpetuated by software vendors. Third party S&M options have a place in the market, as they do reduce the cost (and the pain) of paying for support (especially for new and unneeded product releases).
In terms of the current lawsuit by Oracle against TomorrowNow and SAP (which, as a result, might deter prospective customers from opting for third-party service providers), Rimini Street believes the court case isn't really about the legality of third party support, but rather specific allegations regarding TomorrowNow's business practices. Specifically, Rimini Street refers to the alleged practice of downloading updates and fixes (sometimes for unlicensed products) after a client's maintenance contract has ended.
Rimini Street's support processes are thus built to ensure it downloads only what a client has access to. In fact, Rimini Street has some clients that started with the provider after their support contracts with Oracle ended, so Rimini is unable to download and provide them with the updates and fixes from Oracle that the customers once had access to. Rimini thus provides support to these clients just like any other client—creating fixes as needed.
The bottom line is this: Customers want and need S&M agreements, but vendors are either not meeting their needs, or they are doing so at unjustifiable prices. As long as third party maintenance firms like Rimini Street pay attention to the needs of customers, these providers will do well.
This is part two of the two-part article Is There a Street Corner for a Vendor-neutral Third Party Support and Maintenance Provider?